"The employee or enrollee can select any hospital or clinic but must pay the difference between the contribution limit and the actual price."

"Reference pricing serves as a reverse deductible. Rather than the patient paying up to a defined limit and then the insurer covering the remainder, the insurer pays up to a defined limit and the patient pays the remainder. This has the remarkable feature of exposing the patient to the variation in prices for treatments that are above deductible thresholds. And the patient's contribution isn't limited by an annual out-of-pocket maximum.“

..the California Public Employees' Retirement System..."was upset after noticing it paid between $20,000 and $120,000 for the same procedure (knee and hip replacement) across the state, without commensurate differences in outcomes. In January 2010, the retirement organization established a $30,000 reference-price limit on what it would pay, and the administrators identified 41 hospitals that charged less than the limit while scoring well on quality criteria. Calpers launched an outreach program informing employees that they had their usual coverage at these "value-based" facilities but would have to pay the extra money charged elsewhere."

*to read the full WSJ article “ Comparison Shopping for Knee Surgery” by James C. Robinson, highlight and click on open hyperlink http://online.wsj.com/news/articles/SB10001424052702303448104579152111004814066